2015 economic studies common assumptions scope of …

M A Y 2 1 , 2 0 1 5 | W E S T B O R O U G H , M A

Wayne Coste

P R O J E C T M A N A G E R , E C O N O M I C P L A N N I N G

Planning Advisory Committee Meeting

2015 Economic Studies Common Assumptions Scope of Work - Draft

Outline

• Summary

• Stakeholder Input for 2015 Economic Studies

• Economic Study Metrics

• Economic Study Assumptions Affecting Energy Cost Results

• Assumptions – Demand – Development of the base network model – Resource modeling – Interchange modeling – Operating reserve – Fuel prices

2

Three 2015 Economic Study Requests

• Keene Rd. Interface (SunEdison) http://www.iso-ne.com/static-assets/documents/2015/04/a6_sun_edison_presentation_economic_study_keene_rd.pdf

• Impact of Offshore Wind Deployment on New England’s Wholesale Electricity Markets and Operations [Massachusetts Clean Energy Center ]

http://www.iso-ne.com/static-assets/documents/2015/04/a6_cec_presentation_economic_study_offshore_wind.pdf

• Impact of Maine Upgrades Identified in ISO-NE’s Strategic Transmission Analysis for Wind Integration [RENEW Northeast (RENEW)]

http://www.iso-ne.com/static-assets/documents/2015/04/a6_presentation_renew_strategic_transmission_analysis_wind_integration_economic_study_req.pdf

3

http://www.iso-ne.com/committees/comm_wkgrps/prtcpnts_comm/pac/mtrls/2013/may222013/a2_draft_scope_of_work_2013_economic_studies_052213.pdf




















Summary

• The ISO will perform all three Economic Studies – The studies will be given priority by the ISO and Draft results to be

presented to PAC by late 2015 or early 2016 – Final reports completed after consultation with the PAC

• The studies will compare the performance of the future system with additional representative future system improvements – The study will not include detailed transmission planning analysis, such as

new system impact studies

• The results may be used to inform the region on the need for future – Market Efficiency Transmission Upgrades in the Keene Road area – Public Policy Transmission Upgrades facilitating the integration of wind

• Onshore wind resources in ME • Offshore wind resources in MA/RI

4

Stakeholder Input for 2015 Economic Studies

• The ISO is seeking input from the PAC today – High level scope of work – General study assumptions

• Later PAC input will be sought on – Overall study results and conclusions – Review of draft report

• Special economic study working groups may be formed to provide the ISO input on very detailed technical modeling and simulation methods not of interest to the general PAC audience – This has been done to support past Economic Studies – Past study groups required a very limited number of conference calls – May have different study working groups for each Economic Studies

• Alternatively or in addition to the economic study working group – PAC presentations will be structured to discuss the general PAC economic study

issues upfront – More technical discussions will be discussed with PAC members as a last meeting

agenda item

5

Economic Study Metrics

• Production Costs

• Load Serving Entity Energy Expenses

• Congestion

• Interface Flow Duration Curves

• Generation Energy Production by Fuel Type

• Environmental Air Emissions by Electric Generator Type

• New: Approximate cost estimates of representative transmission upgrades that can relieve congestion – Comparison of Annual Carrying Charges (assumed at 18%-22% of capital

cost estimates) of transmission improvements with the production cost savings resulting from transmission improvements

6

Economic Study Assumptions Affecting Energy Cost Results

• Demand forecasts

• Energy Efficiency growth rates

• Renewable development and integration

• Types and locations of new resource development

• Potential retirements

– Coal

– Oil

– Nuclear

• Fuel price

• Environmental emission allowance prices

7

Key Simulation Data

• Demand

• Transmission – Transmission Network – Internal Interface Limits – Phase Shifters – Line Monitoring – Contingencies

• Resources – Thermal Units – Hydro Units – Pumped Storage – Wind Units – Active Demand Resources, Energy Efficiency and Real-time Emergency

Generators – Imports/Exports – Reserve Requirements

8

APPENDIX SIMULATION METHODOLOGY Development of Base Model

Overview of Assumptions – Consistent with 2015 CELT

• Demand

– Net of Energy Efficiency (EE) and Photovoltaic (PV) – including forecasts

– Active Demand Resources (DR) treated as supply

– Hourly load profile based on 2006 weather (synchronized with wind data)

• Supply resources considered

– Results from Forward Capacity Auction #9

– Other Energy Only Resources

– Wind in the each study are specified by the economic study request

• Wind resource production modeled based on New England Wind Integration Study (NEWIS) data

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50/50 Summer Peak Load Forecast Effect of Behind-the-Meter PV and Passive DR

12

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sum

me

r P

eak

Lo

ad (

MW

)

Summer 50/50 Peak Loads

CELT/Gross Gross - PV Gross - PV - Passive DR

Network Modeling

• Modeling of Transmission Network – ISO-NE FERC 715 filling of summer case – Detailed modeling in ISO-NE region only – Representation for neighboring systems

• Detailed network modeling not required for NY, NB and HQ • Tie-line flows modeled by dummy resources at external nodes • Base flows based on historical line flows

13

Network Modeling (cont)

• Modeling of Internal Interface Limits – The latest ISO-NE estimated internal interface limit values reflected

• Modeling of transmission line – All 230 kV and 345kV circuits ISO-NE region are monitored

• Nearly 300 branches monitored • Includes transformers that step up to 230 kV and above

– Generator step-up (GSU) transformers are excluded • Ensure a generating plant output is not limited by GSU modeling

• Monitoring of Transmission Line – 115 kV and above lines in areas of concern as appropriate

• Maine for – Strategic Transmission Analysis – Wind Integration study – Keene Road study

• SEMA / RI for off-shore wind study

14

Network Modeling (cont)

• Modeling of contingencies – Modeled same contingencies as defined in previous GridView cases

• Based on 3 years of historical binding contingencies in Day-Ahead Market • 100 out of 160 frequently occurring identified and modeled

– Full set of transmission planning contingences (OP-19) not modeled

• Additional system contingencies identified by relevant needs assessments and solution studies

15

Thermal Units

• Points of interconnection for resources based on 2015 FERC 715 filing summer cases

• Existing thermal units – Simulation study production cost parameters: Heat rate curve, Start-up

cost, No-load cost and etc. – Primary and secondary fuel definition are based on 2015 CELT

• Operational limits assumed same as previous economic study – Minimum up time, Minimum down time and Start up time – Ramp rate limits

• Energy limits: assume no energy limits

• Future thermal units – Generic – Production cost parameters based on: unit type, technology and rating

16

Thermal Units (Cont.)

• Combined Cycle Units – Individual machines from a combined cycle plant are modeled

separately, connecting to different buses

• Outages – Thermal units derated to reflect the forced outages using Equivalent

Forced Outage Rate (EFOR) – Planned maintenance schedule will be developed and held constant

across cases

17

Hydro Units

• Hydro units modeled using – Hourly energy generation profiles – Used in previous economic studies

• Hydro units are assumed no maintenance outage

18

Pumped Storage Units

• Modeled in peak shaving mode – Pumping during off-peak hours – Generating during on-peak hours

• Pumped Storage physical parameters – Minimum pond size – Maximum pond size – Plant Capacity Factor – Based on assumptions used in previous studies

19

Wind Units

• Modeled as hourly resources, – Pre-defined using an hourly profile per RSP area – Same as used in previous economic studies

• Wind and hourly load profiles based on NEWIS data – ME-BHE (On-shore) – ME-CMP (On-shore) – NH (On-shore) – RI (Off-shore) – SEMA (Off-shore) – VT (On-shore) – WEMA (On-shore)

• Wind will be curtailed when transmission is constrained

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Wind Profiles Based on NEWIS Profiles

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Hourly Profile (to be used in the simulations) Smoothed Hourly Profile (conceptual visualization)

0.

50.

100.

150.

200.

250.

300.

350.

400.

450.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Offshore: SEMA

0.

50.

100.

150.

200.

250.

300.

350.

400.

450.


Offshore: SEMA (rolling 24 hour average)

Wind Profiles Based on NEWIS Profiles

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Hourly Profile (to be used in the simulations) Smoothed Hourly Profile (conceptual visualization)

0.

500.

1000.

1500.

2000.

2500.

3000.

3500.

4000.

4500.


On-shore: BHE

0.

500.

1000.

1500.

2000.

2500.

3000.

3500.

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4500.


On-shore: BHE (rolling 24 hour average)

Photovoltaic

• Incorporating a time stamped, chronological solar PV profile

• National Renewable Energy Laboratory (NREL) has developed a simulated solar PV dataset based on 2006 weather – New England specific – Profiles by RSP area available

• Consistent with methodology used for wind profile

• Profiles to be developed consistent with the PV forecast discussed with the DGFWG

23

Demand Side Resources

• Active DR, EE and RTEG are modeled explicitly – Hourly profile for each category of demand side resource – FCA amounts used through capacity commitment periods

• Forecasts – The latest EE forecast through the year 2024 is reflected – Active DR and RTEG are held constant for years beyond capacity

commitment period (same as other FCM resources)

• Modeled the same as previous economic studies

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0

500

1,000

1,500

2,000

2,500

3,000

Jan

uar

y

Feb

ruar

y

Mar

ch

Ap

ril

May

Jun

e

July

Au

gust

Sep

tem

be

r

Oct

ob

er

No

vem

be

r

De

cem

be

r

Tota

l De

man

d R

esp

on

se A

dju

stm

en

ts(M

W)

Effect of All DR Programs on Hourly LoadsISO New England

Load Modifiers (Base Case) Energy Efficiency (EE), Active Demand Resources (DR) and Real-Time Emergency Generation (RTEG)

25

“Passive” EE

Real Time Emergency Generation

“Active” DR

Imports and Exports

• Hourly imports and exports over the following external interconnections are modeled based on the average of 2012, 2013 and 2014 historical interchange values* – New York AC – NNC – Highgate – New Brunswick – Cross Sound Cable

*The same approach used in previous economic studies for representing import/export assumptions

26

Modeling of Imports/Exports

ISO -NE External Interface

Interchange Modeling

• Interchange with external areas will be based on: – Three year average

• 2012 • 2013 • 2014

– Monthly diurnal profiles – Five interchange profiles

• HQ Phase II • HQ Highgate • Maritimes • New York interconnection AC • New York interconnection DC

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-2000

-1500

-1000

-500

0

1 2 3 4 5 6 7 8 9

10

11

12

Flo

w (

MW

)

Average Interchange - HQ Phase II Averaged Diurnal Profiles: 2012 - 2014

2012 2013 2014 Average

Quebec to New England: Phase II

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Note: negative values represent imports; positive values represent exports.

-250

-200

-150

-100

-50

0

1 2 3 4 5 6 7 8 9

10

11

12

Flo

w (

MW

)

Average Interchange - HighgateAveraged Diurnal Profiles: 2012 - 2014

2012 2013 2014 Average

Quebec to New England: Highgate

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-800

-600

-400

-200

0

200

400

600

1 2 3 4 5 6 7 8 9

10

11

12

Flo

w (

MW

)

Average Interchange - MaritimesAveraged Diurnal Profiles: 2012 - 2014

2012 2013 2014 Average

Maritimes to New England

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-1500

-1000

-500

0

500

1000

1 2 3 4 5 6 7 8 9

10

11

12

Flo

w (

MW

)

Average Interchange - New York ACAveraged Diurnal Profiles: 2012 - 2014

2012 2013 2014 Average

New England to New York - AC Interface

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-100

0

100

200

300

400

1 2 3 4 5 6 7 8 9

10

11

12

Flo

w (

MW

)

Average Interchange - New York DC Averaged Diurnal Profiles: 2012 - 2014

2012 2013 2014 Average

New England to New York - DC Interface

32


Modeling of Operating Reserves

• Operating reserve requirement is determined in real time – Based on the first and second largest system contingencies – Resource profiles (hydro / wind / interchange etc) excluded

• Current operating reserve requirements – 125% of the first contingency in ten minutes split between

• Ten-Minute spinning Reserve (TMSR) = 50% • Ten-Minute Non-Spinning Reserve (TMNSR) = 50%

– Thirty-Minute Operation Reserve (TMOR) not modeled • Assumed to be adequate • Provided by hydro, pumped storage and quick-start resources • Reasonable assumption except, possibly, at times of peak loads

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ISO-NE Reserve Requirement

34

Reference: Introduction to Wholesale Electricity Markets (WEM 101) - Reserve Market Overview http://www.iso-ne.com/support/training/courses/wem101/17_reserve_market_overview_likover.pdf

Modeled Not Modeled (assumed not a constraint)

http://www.iso-ne.com/support/training/courses/wem101/17_reserve_market_overview_likover.pdf



Fuel Price Forecast – EIA’s 2015 AEO Base

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0.00

10.00

20.00

30.002

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5

20

16

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19

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Fue

l C

ost

(2

01

3 $

/MB

tu)

2015 Annual Energy Outlook Reference New England Fuel Prices

Coal Natural Gas Distillate Fuel Oil

Residual Fuel Oil Biomass Nuclear

Monthly Gas Price Profile

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0.000

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1.000

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2.000

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3.000

Jan Feb Mar Apr May Jun Jly Aug Sep Oct Nov Dec

Mo

nth

ly N

atu

ral

Gas

Mu

ltip

lier

(Pe

r U

nit

)

Month

Monthly Natural Gas Price Multipliers

With New Pipelines W/o New Pipelines

January, February and December gas prices equal residual oil in each year ($/MBtu)

2015 economic studies common assumptions scope of …

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